Institutional Economics: Intertwining Society, Economics and Ecology
Friday, Jan. 6, 2023 8:00 AM - 10:00 AM (CST)
- Chair: John NIcholarsen, University of Denver
Economists Know Best? Paternalism, Agency, and the DMDU Challenge
AbstractFor well over a century the standard economic approach to policy formation has been grounded in a paternalistic ethos in the profession, in which the economist is taken to know best. Paternalism infuses welfare economics, and is enacted through the application of Kaldor-Hicks, cost-benefit analysis, and social welfare functions in policy design and assessment. While empowering economists, the approach undermines the agency of those economists purport to serve by obstructing meaningful engagement with stakeholders who bear the effects of the world's most pressing social and ecological crises. The approach also interferes with policy innovation and discovery, learning by doing, and adaption to changing world circumstances, leaving vulnerable communities at risk of unexpected adverse events. In contrast, a new approach to professional engagement, Decision Making Under Deep Uncertainty (DMDU), displaces economic paternalism, foregrounds stakeholder values while engaging stakeholders as equals in policy discovery, and generates policy innovation and adaptation in the face of an unknowable future. In these ways DMDU provides guidance for institutionalist economists looking to confront the kinds of wicked problems that define our contemporary social, economic, and ecological worlds.
Exploring the Role of Exit & Voice in Institutional Development of the Varieties of Capitalism
AbstractBased on their previous experience, in 2001 Hall and Soskice postulated a theory on varieties of capitalism that has generated interesting and very diverse debates. Many aspects have been questioned, but because of the scope of the discussion, we can consider that their work generated a research program that is still important.
We propose that a correlate can help to deepen and clarify the discussion generated by Hall and Soskice's proposal regarding VoC. This paper proposes to confront that research program with Albert O. Hirschman's dissertation on exit or voice, in an attempt to go back to basics, but from a broader multidisciplinary institutional perspective.
As G. Hodgson points out, economists have considered the market as a homogeneous and undifferentiated entity, limiting the classification by the degree of prevailing competition and the number of participants. The influence of the neoclassical perspective has been decisive in the omission of the problematization of the market concept and its institutionalist analysis.
In contrast, VoC's research program defines the varieties of capitalism based on the characteristics of the markets for labor, capital (financing the firm) and suppliers (various inputs) in which the firms, considered the main actors of economic life, participate.
Changing Landscape of Development Finance in the Case of Climate-Vulnerable Countries like Nepal
AbstractThe latest report of the Intergovernmental Panel on Climate Change (IPCC) warns that the climate crisis is widespread, extraordinary, and intensifying. This report came out at a time when the most vulnerable nations are already burdened economically and socially because of the COVID-19 pandemic. Precious financial resources these nations would otherwise have used to adapt to the climate crisis have been diverted to tackling the pandemic.
Nepal is one of the smallest contributors to greenhouse gas emissions but the Global climate risk index 2021 ranks it tenth on the list of countries most vulnerable to the effects of climate change. Systemic issues such as climate change, carbon emission, biodiversity loss, etc. cannot be tackled without systemic change in how the environment and natural resources are governed (O’Brien 2012, Ely 2021 ).
This paper will link the broader political and institutional economics of climate change/ climate finance and recommend how Nepal could still achieve sustainable development goals and desired economic growth by adopting environmentally sustainable practices.
The Baran Ratio, Investment, and British Economic Growth and Development
AbstractInvestment in capital, new technology, and agricultural techniques has not been considered an endeavor worthwhile in a medieval economy because of a lack of strong property rights and no incentive on the part of lords and barons to lend money to or grant rights to peasant farmers. Therefore, the medieval economy and standards of living at that time often have been characterized as non-dynamic and static due to insufficient investment in innovative techniques and technology. Paul Baran’s concept of the economic surplus is applied to investment patterns during the late medieval, mercantile, and early capitalist stages of economic growth in England and the UK. This paper uses Zhun Xu’s Baran Ratio concept to try to develop general trends to demonstrate and to reinforce other historical accounts of these times that a productive and sufficient level of public and private investment out of accumulated capital income, taxation, and rents does not have a real impact on economic per capita growth until around the 1600s in Britain. This would also be about the time of capitalism’s ascent as the dominant economic system in England. Even then, dramatic increases in investment and economic growth do not appear until the late 18th Century when investment more consistently becomes more than one hundred percent of the level of economic surplus and takes in government spending. The types of investment, threshold amounts of investment out of profits and rents along with government spending seem to matter when it comes to a growth path raising GDP per capita and national income per capita to higher levels. Although much of this knowledge perhaps is embodied in current historical accounts, the Baran Ratio nicely summarizes and illustrates the importance of levels of investment to economic growth.
Radical Conditioning: International Monetary and Institutional Design Principles for Economic Development Trajectories, Protections and Preparations
AbstractGiven current global economic disruptions, disarray and inequalities, propositions directed at alternative configurations for the future of international economic integration abound. Using an original institutionalist approach throughout, this paper will first briefly examine past and current proposals for global integration, focusing on the sources of instabilities, dysfunction and resulting inequalities. Predicated on the assumption that no significant fundamental reform within and of the current global institutional arrangement will be forthcoming, this work will move to offer a radical, revolutionary proposal for developing countries (“periphery”) in the form of an alternative international monetary instrument to mediate, moderate, condition the current conditionalities, and rebalance international economic integration for 21st Century economic development. This work will look to foster solidarity in international development through monetary and institutional design principles for a more equitable and resilient global integration and coordination framework.
- B5 - Current Heterodox Approaches
- Q5 - Environmental Economics